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In today’s episode of The Startup Chat, Steli and Hiten talk about remote work or distributed work.

The topic of having remote or distributed teams is a hot one in the startup world. It is common for some startups that implement remote work policies to see increased productivity, efficiency, and fulfillment from their employees. However, the reverse can be the case when a remote team is not managed properly

In this week’s episode, Steli and Hiten talk about having a remote work or distributed work, what the workforce could look like in the future, how the business landscape has changed and much more.

Time Stamped Show Notes:

00:00 About today’s topic.

01:44 Why this topic was chosen.

02:10 One side of the trend line.

04:34 Another side of the trend line.

06:40 What the workforce could look like in the future.

07:31 How we’re going to get better at managing remote teams.

08:16 Why the growth rate of distributed companies is going to play a bigger role in the future.

08:56 Companies that have had success being fully remote.

09:43 How the business landscape has changed.

10:37 How the future of the workforce could look like.

3 Key Points:

It’s so difficult to hire from a local area

We’re going to find and learn how to hire productive team members no matter where they are

The growth rate of distributed companies is going to play a bigger role in the future.

[0:00:01]

Steli Efti: Hey everybody. This is Steli Efti.

[0:00:03]

Hiten Shah: And this is Hiten Shah, and today on The Startup Chat, we’re going to do first of a few, and I know we’ve talked about this before at some point too, but I think this is a trend, and so the topic is about remote work, or what some are calling distributed work, and we just wanted to talk about it as a trend and talk about why it’s so important right now and why so many people are talking about it. And, on top of that, I’m doing some research on the topic, by creating a report with my team at FYI, and we’re partnered with a company called [Mirro] to do that, and before we even begin, I did want to give one shout-out because there’s a newish podcast and blog by Matt Mullenweg from Automatic, and it’s called Distributed, and it’s at distributed.blog. One of the things that Matt, I believe, really believes is that he likes calling it distributed work, not remote work. I think he’s got the pet peeve similar to mine of, put it as self-funded instead of bootstrapped.

[0:01:09]

Steli Efti: Yup.

[0:01:11]

Hiten Shah: But he’s really talking about what most of us have been talking about as remote work. So distributed work, remote work, this is a trend. I know you’ve been doing it for years. I’ve been doing it for about 16 now. Let’s talk about it.

[0:01:24]

Steli Efti: Yeah. And specifically, I think I’d love to talk about why it’s seeming to be bubbling up even more so than I’ve seen ever before and becoming more and more of a topic. I see a lot of debate area kind of an echo chamber of … Just recently there have been a bunch of articles about more and more startups leaving the Bay area or more and more startups starting to hire more aggressively remotely. I think recently there were big news that Stripe said their next big hiring hub is going to be distributed or remote, right?

[0:01:58]

Hiten Shah: Yup.

[0:01:59]

Steli Efti: And that was kind of a big announcement, for a unicorn startup to say that, that was, I think, traditionally very much based on setting up these large offices, right, and headquarters. And, so, I wanted to talk about why this is a trend and why I don’t think it’s going to die down, right? So the trend part on my end, from my perspective, is just that … I mean, it’s just like everything else. You go through cycles, but the trend plan is definitely going up in the sense that there’s a bunch of people that will try this. Then they will overhype it and write about this as, “This is the solution to all problems. This is the biggest, best, next thing. Every company needs to do this.” There’s like an overexcitement, and then there’s a sobering up period where a bunch of these startups fail. A bunch of these people that tried this, it didn’t work out for them. And then there’s this new wave of, like, writing cynically about it. And we’ll be like, “This is why remote didn’t work. This is why we decided to go back to an office. This is why … ” Right? And this everybody goes, “Oh, this … Ah, does remote work really work? Oh, I heard a lot of bad things. I hear a lot of people that tried it, those startups that tried it and failed.” And then rinse and repeat, right? Because there’s always a part of that cycle, a bunch of companies that did go through it, had some hard times as well or had to adjust or had to learn and grow and figure out processes and best practices on how to do this well. And during the time of figuring it out, they were quiet but, then, once they figured out, they again go out in the world and were, like, “No, no, no. Remote work does work. We’ve been doing it now for a number of years, and here’s what we learned on how to do it well.” And so you go through these cycles, and I feel like we’re just coming up again on a cycle where just there’s been another huge batch of companies that went through quite a strong period, that went through a lot of challenges organizationally on how to do distributed really, really well and are now kind of hitting their stride and starting to write again more about it. You have more and more examples today than ever of startups that have grown quite significantly and are very successful running distributed teams. That’s one thing. And the other side of the trendline is that it’s just becoming harder and harder to only hire local talent, even in an area like the Bay area that probably has the highest concentration of tech talent in the world, the market is so overheated and so overly competitive, and people are jumping from one insane offer to the next every eight to twelve months. So the retention is a problem. Housing is a problem. Salary is a problem. So hiring just focused on one local area is just very, very, very hard to do, and so now you have this whole trend in the Bay area where a lot more companies just go, “It’s not feasible to just hire all our team from this physical location. It just doesn’t make sense. We cannot do it successfully.” So we are forced to be more open-minded and look elsewhere for talent, and since we have to look elsewhere for talent, we might as well start learning more about remote and distributed, and we probably have to be get better at it and try it out. So I think that that’s kind of the phase that we’re in right now, but the long-term trendline … Do you see this ever going completely down? Can you imagine a world where five or ten years from now every company has decided that, no, remote and distributed doesn’t work, and so now the future of business and the future of work is you will always go back to an office because that’s the only way to get work done?

[0:05:45]

Hiten Shah: You know, I’ve been doing it a long time. I know you’ve been doing it a long time.

[0:05:50]

Steli Efti: Yup.

[0:05:52]

Hiten Shah: There are other folks out there that have been doing it a long time, where there’s so many people understanding a lot of the benefits of doing it, and I think what will probably end up happening is, just like Matt Mullenweg kind of is trying to point, it’s distributed work, and it means that you might have different locations, but you might also have people who are not coming into the office ever as well, or coming in rarely. That seems to be where it’s going to really accelerate this trend, and accelerate this is when we don’t just think of it like companies are fully remote or companies are remote first or anything like that. So I think the conclusion of remote work isn’t going to go back to, “Oh, everyone needs to be in an office.” I think what’s going to happen is we’re going to find and learn how to have productive team members no matter where they are. Whether you have an office or people are working from home or working from coffee shops or co-working places, we’ll just get better at doing work if we’re doing work at all stages of the company and all stages of the business when people aren’t in the same place. I think one thing that’s really interesting is I’m not sure if any fully remote company has gone public yet. I’m not sure. I’m trying to think. I’m not sure. Is Upwork public?

[0:07:14]

Steli Efti: Upwork is not public yet I think.

[0:07:16]

Hiten Shah: Yeah, so that’s the only one I can think of, because I think they’re one of the largest, if not the largest.

Steli Efti: I mentioned just … Remember one of the bigger ones in kind of the “old days” was [inaudible], and they were purchased by-

[0:07:45]

Hiten Shah: Or Red Hat, Red Hat too, yeah.

[0:07:46]

Steli Efti: Yeah, yeah, yeah, yeah, yeah, yeah.

[0:07:48]

Hiten Shah: Yeah, yeah, yeah. You’re right. Yeah, so there’s been a few. So, yes, there have been companies going public, I think one of the reasons I ask is because growth rates of distributed companies versus non-distributed companies is one of the things that people are going to start thinking about, is my kind of opinion.

Steli Efti: I think there have been a number of success stories, but not to the degree of, you know, the biggest success stories that we can imagine or that we’ve seen in the last 20 years, right? There have not been like a Google that’s fully remote or a Facebook or whatever else you would want to put out as an example.

[0:08:42]

Hiten Shah: Yup.

[0:08:42]

Steli Efti: But it doesn’t mean that … But I think, and I’m banking on, the fact that there are going to be these companies, and so it just takes … As the world is changing, as technology is changing, as the way we organize work and talent, and as the world is becoming a lot more global from day one, both from the … Like just think about today’s companies, the rate at which a new business is instantly selling to an international market today versus 100 years ago, right, where it was, like … There was a time, maybe not even 100 years ago, there was a time period where it probably was almost unheard of for a completely new company to have a customer that is based on a totally different country on day one.

[0:09:33]

Hiten Shah: Yeah, true.

[0:09:34]

Steli Efti: Right? And, so, that was unheard of, almost impossible to imagine, whereas today it is, you know, so common it’s crazy, and I think that that trend is going to continue, and the same thing goes to hiring talent wherever you can find it and distributing work. And that doesn’t mean … And this will be another episode for sure for the listeners.

[0:09:56]

Hiten Shah: Yeah.

[0:09:58]

Steli Efti: This doesn’t mean, as you pointed out, that it has to be complete distributed, where there’s no office. There’s no … Just everybody is remote.

[0:10:05]

Hiten Shah: Right.

[0:10:06]

Steli Efti: There’s going to be all kinds of flavors of this, right, where you have some offices and some remote workers or, you know, any kind of mix, even like having multiple offices around the world, especially when there’s cross-functional teams, or teams that are divided up in different offices, that part of the work then has to be distributed because not everybody that’s working on a project is in the same physical location. So I think that that trend is never going to slow down, and my recommendation to anybody that is interested in entrepreneurship and business is, instead of debating, “Is it working? Isn’t it working? Is it good? Is it bad?” I think this is a trend that’s not going to stop. This is the way the world is going to … The direction, the entire world is going to, and so it’s more about utilizing and getting better at it and utilizing the strengths of distributed work and recognizing it doesn’t mean that if you enjoy having an office that you have to give it up, but it does mean recognizing that not all work can happen in a physical location or should happen.

[0:11:17]

Hiten Shah: Right.

[0:11:17]

Steli Efti: And, so, how do you set up your company and your culture where work can happen in multiple places at multiple times and how can you become more open-minded about potentially tapping into talent pools that are not living around the corner, right, or not living in a physical, close proximity to wherever you wanted to have your office or wherever you live. I think becoming more open-minded and learning more about it and getting better at this is a long-term investment, both for the success of your business, but also your personal career, because this stuff isn’t going away, and the companies that get really, really good at it, they will have a competitive advantage in one way or another.

[0:11:55]

Hiten Shah: Yeah, absolutely. I think that that’s … We’re definitely in agreement there. This is a trend, and it’s going to stay, and companies are going to need to embrace some aspect of it, even if they don’t go fully remote. And I’m seeing a lot of companies start fully remote, so the amount of companies that are going to be remote is definitely going to increase, and even, like, only remote.

[0:12:15]

Steli Efti: Yeah. So let’s point out two episodes that people check out if they’re interested in getting better at remote work already. One is Episode 203, Productivity Tips for Remote Workers, and then Episode 181, How to Manage Remote Teams. Check out those two episodes if you want to get better at this, if you want to learn about this, which is something I recommend everybody to do, and then look out for more episodes on distributed and remote teams from us on The Startup Chat. Look for you very soon.

Stay Updated on The Startup Chat

Steli Efti is the co-founder and CEO of Close. He’s Silicon Valley’s most prominent sales hustler, a YC alumni, advisor to several startups and entrepreneurs and the author of The Ultimate Startup Guide To Outbound Sales.